Louise Bennetts of the Cato Institute has a great piece in Jurist, entitled “Dodd-Frank: Discretion in an Age of Uncertainty.” Ms. Bennetts describes one key theme of the separation of powers challenge to Dodd-Frank—its use of unrestrained regulatory discretion:
Rather than setting a clear mandate for regulators, Dodd-Frank creates a framework, underpinned by objectives and principles — often inconsistent — and gives regulators considerable leeway to implement the provisions as they see fit.”
On the Orderly Liquidation Authority:
Additionally, Dodd-Frank’s central pillar and the public’s security against future bailouts, the Orderly Liquidation Authority, gives the Federal Deposit Insurance Corporation— at the direction of the treasury secretary — the power to liquidate financial companies, bypassing the usual bankruptcy process. However, glaringly absent are both meaningful guidelines as to when this authority should be invoked and, once invoked, clear limitations on regulatory action.
Read the whole piece.